RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/BFA/W/146 
26 September 2006 
 (06-4594) 
Committee on Budget, Finance and Administration  
  
 
 
PROPOSED PLAN OF ACTION TO MEET THE FUTURE BUILDING 
NEEDS OF THE WTO 
 
Note by the Director-General
 
 
 
I. INTRODUCTION 
1. In document WT/BFA/W/145, the Secretariat ex amined the current status of the building 
arrangements for the WTO, assessed the future building needs of the WTO and considered the 
respective advantages and disadvantages of va rious options for addressing those needs. 
2. Further to the consideration of documen t WT/BFA/W/145 by the Committee on Budget, 
Finance and Administration (CBFA), the Director-General wishes to propose a specific plan of action aimed at not only meeting the long-term building needs of the Organization but also addressing the immediate difficulties facing the WTO in terms of office space. 
3. The present document will recall briefly the contex t in which the plans to build an annexe on 
the Avenue de France were formulated and approved,  explain how that context has since evolved and 
finally put forward specific proposals with a view to the formulation by the CBFA of a 
recommendation to the General Council at its meeting in October 2006. 
II. CONTEXT OF PRESENT BU ILDING ARRANGEMENTS 
Current facilities
 
 
4. Since 1995, the headquarters of the WTO has b een located in the Centre William Rappard 
(CWR) which is now 80 years old.  Under the te rms of the Headquarters Agreement (WT/GC/1) and 
Infrastructure Contract (WT/GC/2), the Swiss authorities also agreed: 
 (a) to provide a new conference room adjacent to the CWR and place it at the disposal of 
the Organization free of charge, and  
 
 (b) to arrange for a car park to be built near the CWR with at least 400 spaces for the 
WTO. 
 5. Under the terms of the Infrastructure Contract , the library of the Graduate Institute of 
International Studies (IUHEI), which occupies an ar ea of some 3,000m² in the CWR and 12 parking 
spaces, was due to be rehoused elsewhere by 31 December 1999.  Since alternative accommodation 
for the library has still not been found, the library remains in the CWR.   
6. Consequently, the Swiss authorities agreed to provide temporary accommodation on a rent-
free basis for those staff who could not be housed in the CWR owing to the continued presence of the 
IUHEI library.  As staff numbers have increase d, the task of finding appropriate alternative WT/BFA/W/146 
Page 2  
 
  accommodation has become more difficult.  The tota l staff of the Organization has increased from  
approximately 490 in 1995 to approximately 775 toda y.  A first temporary annexe for 70 staff was 
found in the Avenue Blanc.  Since January 2002, th e annexe has moved to ru e Rothschild where there 
is space for 100 staff.  That annexe is not ideally  situated as it is approximately 1.5 km from the 
CWR.  The space available in the CWR and in the rue Rothschild annexe, in their current 
configurations, is no longer sufficient to hou se adequately the WTO and its Secretariat. 
Shortcomings of the current facilities
 
 7. As noted above, the CWR is now 80 years old a nd is showing its age.  Many of the fittings 
and equipment in the building are either obsolete or in a poor state of repair.  The Swiss authorities 
have begun to study the cost implications of a ma jor refurbishment programme  which would have to 
be carried out if the CWR were to remain the he adquarters of the Organization in the long term.  
These costs, which would have to be borne by the Organization, are currently estimated at 
approximately CHF 40 million.  Apar t from the long term plans, some  refurbishment of the CWR will 
be needed in the short and medium terms, so as to address more urgent structural problems.  The 
CWR site, as it currently stands, is full to capacity.   
8. The rue Rothschild annexe is also virtually fu ll to capacity and has presented not only safety 
but also constantly recurring structural weaknes ses ranging from an electrical fire to floods in the 
basement.  Unless an alternative annexe can be fou nd in the very near futu re, it will be necessary for 
all staff up to and including grade 8 to share offi ces both in the annexe and in the CWR with the 
consequent loss in efficiency that such action would entail. 
9. Although it is recognized that efforts have been , and continue to be made by the Swiss 
authorities to improve the quality and safety of the rue Rothschild accommodation so as to avoid further structural problems, the fact remains that  the building has not been designed to meet the 
specific needs of the WTO, it is vi rtually full to capacity, and therefore cannot continue to provide an 
adequate temporary solution for the needs of the WTO. 
Avenue de France project
 
 10. The detailed background to the Avenue de France project is to be found in paragraphs 7-10 of 
document WT/BFA/W/145.  At the time of its approv al by the General Council in 2001, the Avenue 
de France project was the only option available for dealing with the increasing accommodation needs 
of the Organization.  Notwithstanding the indis putable advantages of a new building equipped to 
modern standards, the project suffers from certain major shortcomings. 
11. One shortcoming is the distance of approximately  1.0 km between the Avenue de France site 
and the CWR.  As indicated in paragraph 20-21 of  document WT/BFA/W/145, a number of facilities 
would have to be duplicated in order to ensure e fficiency of operation with a consequent increase in 
costs.  There would also be an undeniable impact on staff morale as a result of splitting the 
Organization permanently in two.  Furthermore, delegations, especially those representing the smaller 
Members, would be handicapped by the need to move between the two sites to attend meetings. 
12. A further shortcoming of the Avenue de France s ite is the lack of adequate parking space.  
Whereas the building would accommodate some 450 sta ff and potentially some 250 delegates at any 
one time, there would only be 60 parking spaces pr ovided.  Given the existin g chronic shortage of 
parking spaces around the CWR, the construction of the Avenue de France annexe will not alleviate, 
but rather compound,  the problem.  WT/BFA/W/146 
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  Summary  
 13. Since the decision on the Avenue de France proj ect in 2001, the position with respect to the 
building needs of the WTO has clearly evolved.  The possibility of continuing to use the CWR as the 
headquarters in the long term has to be seen agai nst the significant costs of necessary refurbishment 
and severe limitations in terms of further development of the site.  The validity of the choice of the 
Avenue de France site has to be viewed against the losses in efficiency and financial costs involved in 
running two separate sites, and the shortage of park ing space.  Lastly, there is a pressing need for an 
adequate solution to the problem of office overflow caused by the significant growth in staff numbers 
and the continued presence of the IUHEI Library in the CWR. 
14. The Director-General is firmly of the view th at it is necessary at this stage to identify an 
appropriate long-term solution to the building needs of the Organization and, at the same time, to 
adopt a pragmatic bridging solution to the immediat e needs which is consistent with the long-term 
solution. 
15. The Director-General is convinced that the mo st appropriate long-term solution is to locate 
the facilities of the Organization on a single site.  In that way, it will be possible to combine 
economies of scale with efficiency of operation in a purpose-built environment.  As explained above, 
the same could not be achieved by retaining the CW R together with the Avenue de France site.  The 
location of a single site remains to be determined, but it is the understanding of the Director-General 
from his contacts with the Swiss authorities that th ere are potential sites in the Canton of Geneva. 
Bridging solution
 
 
16. As far as the immediate needs of the Organization are concerned, the Director-General wishes 
to propose that the necessary re placement of the rue Rothschild annexe will be identified as soon as 
possible so that the current office space problems can  be alleviated.  The replacement must be of a 
sufficient size to cover the needs of the WTO in terms of office and parking space until the long-term 
solution has been implemented.  Such replacement must also provide for enough office space to house 
staff displaced by refurbishment work s in the CWR.  It must be in the close vicinity of the CWR for 
reasons of cost and efficiency and it must be of an  appropriate standard for the Organization.  Given 
the pressing needs of the Organization for increased office space, the replacement building should be 
available in the short term.  The larger bui lding described in paragraph 26 of document 
WT/BFA/W/145 (Chemin des Mines 15 & 15 bis – the so-called Serono building) would meet those 
requirements and is available as of 1 January 2007.   This building would offer sufficient space to 
accommodate the needs of the WTO up until 2016-2018 , the projected date at which the proposed 
long-term solution could be made available.  This option is used in this document as an example of a 
solution which would be suitable for the Orga nization, and for purposes of estimated cost 
implications.  For practical purposes, a number of as sumptions are made in this document – including 
the availability of funds and the readiness of the Swiss authorities to provide the necessary means to 
implement such option.  If the buildi ng located at Chemin des Mines 15 & 15 bis cannot be secured, 
another alternative meeting those requirements will have to be found in the short term to avoid the 
office overcrowding that would otherwise result. 
17. Obviously, the removal of the HEI library from the CWR, in the very short term, would 
significantly alleviate the immediate needs of space of  the WTO.  The Director General is ready to 
work with the Swiss authorities in order to find adequate solutions to these immediate needs, keeping 
in mind the budgetary constraints of the Organization. 
 
  WT/BFA/W/146 
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  Cost implications
 
 18. In order to examine the cost implications of housing the WTO, three options have been 
identified: Option 1, the permanent establishment of the WTO on two sites; Option 2 (a), regrouping 
on a single site with the purchase of the Serono bu ilding as an interim measure; and Option 2(b), 
regrouping on a single site with the rental of the Serono building as an interim measure.  The 
combined cost implications of the above long-term and bridging solutions (Options 2(a) and 2 (b)) are 
compared in Annex 1 with the cost implications of maintaining the CWR as headquarters in conjunction with the Avenue de France site (Option 1).  The comparison is made in terms of both net 
present value (NPV) and current costs.  Where as in document WT/BFA/W/145 a time horizon of 
2030 was used for the calculations, in the present case a time horizon of 2068 (the date at which the 
loan to finance the construction of the new building on a single site is fully reimbursed) is used.  The 
NPV calculations have also been adjusted so th at the proceeds from the sale of the CWR and Serono 
buildings are used to reduce the amount of the loan  required to construct the new building on a single 
site and no appreciation in the commercial price of the Serono building is assumed .  
19. Insofar as annual cost is concerned, option 1 woul d entail a total cost of CHF 46,600,000 over 
the period 2007-2018, to be compared with a total cost of CHF 32,480,000 for options 2a and 2b over 
the same period.  Over the period from 2018 to 2068, i.e. the date at which the loan to purchase the 
new building in options 2a and 2b would be re imbursed, the total cost of option 1 would be 
CHF 128,400,000, the total cost for option 2a would be 187,850,777 and for option 2b would be 
CHF 203,930,777.  The total annual cost averaged over the 62-year period from 2007 to 2068 is thus 
estimated at CHF 2.8 million for option 1, CHF 3.6 million for option 2a and CHF 3.8 million for 
option 2b.  
20. Apart from the cost savings arising from the concentration of all facilities on a single site, the 
replacement of the CWR by a purpose-built state-of-the-art building would also bring with it other savings arising from the more efficient use of ener gy, water and other services.  For instance, it is 
estimated that electricity consumption would be reduced by approximately 75 per cent-80 per cent, 
representing a saving at present-day costs of approx imately CHF300,000 per year in the case of a 
building of the size of the CWR.      
21. Costs incurred and commitments made to date in  respect of the preparatory work related to 
the Avenue de France project total CHF 5,500,000.   Under the terms of the preliminary loan 
agreement, if the construction loan is refused or not obtained by 31 December 2006, the costs incurred 
under that loan will be covered by the Swiss au thorities, and the WTO will not be required to 
reimburse  FIPOI . Otherwise, such costs will  be borne by the WTO. 
Proposal
 
 22. The Director-General wishes to propose the following: 
 (a) that the CBFA recommend to the Gene ral Council that the Director-General be 
 authorized to commence discussions with the Swiss authorities on the identification 
 of a suitable site for a new permanent headquarters; 
(b) that the CBFA further recommend to the General Council that th e Director-General 
be authorized to enter into discussions w ith the Swiss authorities with a view to  WT/BFA/W/146 
 Page 5 
 
 
  finding an adequate intermediary solution to the housing needs of the Organization 
until its removal to a new permanent headquarters1; 
 (c) that the CBFA further recommend to the General Council that th e Director-General 
be authorized to inform  the Swiss aut horities that the WTO does not wish to pursue 
the execution of the Avenue de France project. 
                                                      
1 The Serono building at 15 & 15 bis chemin des Mines is used as an estimate for cost implications of 
interim solutions to the current need s of the WTO, as a replacement for th e annexe currently located at rue 
Rothschild and as a transitional solution pending the removal of the Organization to a new permanent headquarters.  Alternative options meeting the same requirements described in paras. 17 and 18 above may be 
considered.  WT/BFA/W/146 
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  ANNEX 1 
Cost Implications of Long-Term Building Options
 
(in terms of net present value (NPV) and current cost ) 
 
Option 1 (permanent establishment on two sites)  
 
 NPV  
(CHF) Current 
annual cost  
(CHF) 
(in 2007) Current 
annual cost 
(CHF) 
(in 2008) Current 
annual cost 
(CHF) 
(2009-2056) Current 
annual cost 
(CHF) 
(2056-2058) Current 
annual cost 
(CHF) 
(2058-2068) 
Serono preparation cost 8,000,000 8,000,000     
Serono rental (at commercial rate) 5,941,176 3,000,000 3,000,000    
Serono duplication 
resources  990,196 500,000 500,000    
Duplication of 
resources in Avenue  
de France 33,780,494   1,000, 000 1,000,000 1,000,000 
Reimbursement of loan 
to cover CWR 
improvement cost 
(estimated at 
CHF40 million) 25,641,662 800,000 800,000 800,000   
Reimbursement of loan 
of CHF 60 million for Avenue de France 
project 36,968,948   1,200,000 1,200,000  
Total cost 111,322,477 12,300,000 4,300,000 3,000,000 2,200,000 1,000,000 
 
  WT/BFA/W/146 
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  Option 2a (regrouping on a single site with the purchase of the Serono building)  
 
 
 
Option 2b (regrouping on a single site with the rental of the Serono building)  
 
 NPV 
(CHF) Current annual 
cost  (CHF) 
(in 2007) Current annual 
cost (CHF) 
(2008-2018) Current annual 
cost (CHF) 
(beyond 2018) 
Serono preparation cost 8,000,000 8,000,000   
Duplication of resources in 
Serono 5,393,424 500,000 500,000  
Reimbursement of loan to cover 
CWR improvement cost (estimated at CHF10 million)  2,157,370 200,000 200,000  
Cost of Serono rental plus 
reimbursement of loan to cover cost of new building 117,532,594 1,340,000 1,340,000 4,078,616  
Total cost  133,083,387 10,040,000 2,040,000 4,078,616 
 
__________  NPV 
(CHF) Current annual 
cost  (CHF) 
(in 2007) Current 
annual cost 
(CHF) 
(2008-2018) Current annual 
cost (CHF) 
(beyond 2018)  
Serono preparation cost 8,000,000 8,000,000   
Duplication of resources in 
Serono 5,393,424 500,000 500,000  
Reimbursement of loan to cover 
CWR improvement cost (estimated at CHF10 million) 2,157,370 200,000 200,000  
Reimbursement of loan to cover 
cost of purchasing Serono + new building 109,404,847 1,340,000 1,340,000 
 3,757,016  
Total cost 124,955,641 10,040,000 2,040,000 3,757,016